PH imposes 4-month duty on Turkish flour

The Department of Agriculture (DA) has imposed a four-month anti-dumping duty on Turkish wheat flour exports to the Philippines in response to a petition filed by local flour millers last year.

Agriculture Secretary Proceso Alcala has ordered the imposition of a dumping duty, which will be in addition to the 7 percent regular import duty on Turkish flour—or as high as 35 percent on hard flour for bread, 39.26 percent on biscuit flour, and 35.21 percent on soft flour that is used for pastries and cookies.

“Pursuant to Republic Act 8752, the Department of Agriculture found, after preliminary determination, an affirmative finding of dumping on the petition filed by the Philippine Association of Flour Millers (PAFMIL) for the imposition of anti-dumping duty against imported wheat flour originating from Turkey,” Alcala said in the order.

The DA chief said the corresponding provisional anti-dumping duty in the form of a cash bond would be implemented starting first week of May.

Alcala also noted that the anti-dumping petition against Turkish flour would be in effect while the Tariff Commission conducts hearings to determine if the dumping duty will be permanent.

The DA decision came after a nearly yearlong study of the petition filed by PAFMIL in May 2013.

“After a thorough examination of the evidence, data and other comment/positions by interested parties, the preliminary investigation has established the existence of a threat of material injury to the local industry caused by the importation of alleged dumped wheat flour from Turkey,” DA said.

Ricardo Pinca, PAFMIL executive director, said that with the imposition of dumping duty on Turkish flour, the Philippine government would benefit in terms of higher import duty collections and value added tax.

Pinca hailed the DA’s decision as “pro-Filipino, pro-fair trade and pro-Philippine labor,” adding that local flour millers are in danger of losing their livelihood to Turkish laborers producing flour products dumped in the country.

“The Philippine wheat flour milling industry has been at the receiving end of unfair trade from Turkey with its cheap subsidized flour being dumped at much lower prices here,” Pinca said.

“With the government seeing the truth of dumping behind the veneer of a very strong Turkish lobby, the Philippine industry can at last breathe a little, to say the least,” he added.

The PAFMIL chief is now banking on the Bureau of Customs to ensure full implementation of the new order. The Philippine government’s decision follows a similar imposition made by Indonesia in 2012, which imposed a 20 percent safeguard duty on Turkish flour.

Other countries in the Asean are also hurting from Turkish flour being sold at dumping prices. While Turkish domestic price for flour in 2012 was $470 per metric ton, its export prices to ASEAN countries were much lower at only $351 per MT in Indonesia; $349 per MT in the Philippines; $400 per MT in Thailand; $367 per MT in Malaysia, $407 per MT in Singapore and $337 per MT in Vietnam.

The export of a product price lower than their domestic selling price in the country of origin constitutes dumping. It is prohibited by World Trade Organization (WTO) rules to which the Philippines, Turkey and ASEAN countries, among others, are signatories.

The dumping duty is based on the price difference between the domestic price of flour in Turkey and the low, subsidized export price of the same product to the Philippines.

DA noted that the difference in Turkish domestic flour prices and their export price ranges from a low of $10.37 per MT (2.28 percent) to a high of $138.97 per MT (39.26 percent). The dumping duty equalizes the Turkish domestic price and the landed cost of the imported product to the Philippines.